How do you approach validation when the users of your product and the customers are different?
For context, I’m building a social impact start up focused on an acute problem for low-income families. We have piloted the product with no code tools and have had 20 users plus 80+ waitlist sign ups in a few weeks.
However, our customers will be businesses that benefit from the increase spend of these families at their stores. How would you go about validating the business model when you know the users want it, but not sure for customers? For early sales conversations, do you always show a prototype? Or do you just verbally pitch the product and get feedback on willingness to pay?
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Sounds like your biz is to lower customer acquisition cost. I would frame it that way.
They’re both customers because they’re both paying, one with money & one with time. In this case you’re a middle man & your job is to appease both parties.
How? If you had a few hundred, maybe a few thousand(dependent on store size) users that used your app you would have some swinging room.
So you need to either come up with a new strategy or pivot.
What I would do? Spitballing without knowing anything
- Get the first store onboard at no cost to them as a case study.
- If it fails, but the stores are still interested then you continue.
- Maybe you need to do that a few times.
- But if you could get a single store & use them as the incentive for more users, then that would do the trick.
- then you could sign more stores & get members simultaneously
Both. You do customer all the discovery and validation with both. Ultimately, you want to validate all sides of any experimental product or business model, not just your customers and users.
“Product market fit” is not the only fit you want to validate. Or to put it another way, validating your customer segment is only the beginning. It’s the one you hear about the most because it’s the best place to start, and most people don’t even get past this point.
You want to validate the whole business model. And more! Things like “founder model fit” can make or break a startup.
Where to start? Riskiest assumptions first. Swallow the frog. Ask the questions that scare you the most.
Check out the winning presentations from the International Business Model Competition on YouTube. They sometimes demonstrate clearly how they methodically validated each of the 9 blocks on the business model canvas. I recommend watching the videos from SwineTech and Owlet.
When validating your business model with businesses, first understand what they want, like more sales or a better brand image. Then, clearly explain how your product helps them achieve this. Use a mix of a prototype and a verbal pitch, backed by data from your users. Discuss pricing openly to see what they’re willing to pay. Finally, be ready to adapt based on the feedback you get. Keep it simple and focused on their needs. Good luck with your venture! Also, here’s an extremely helpful article that might be able to answer all of your questions https://www.cuppa.so/post/customer-success-vs-customer-support-in-b2b-saas